Exam 2: Economic Models: Trade-Offs and Trade

Use the following to answer question: -(Table: Bongos and Frisbees)Use Table: Bongos and Frisbees.Bill and Mickey make bongos and Frisbees.Who should specialize in the production of bongos?

If they bake only cakes,in a single day George can bake 10 cakes,and Greta can bake 5 cakes.If they make only pies,in a single day George can bake 10 pies,while Greta can bake 4 pies.We know that _____ has an absolute advantage and a comparative advantage in making _____.

Use the following to answer question: -(Table: Production Possibilities Schedule I)Use Table: Production Possibilities Schedule I.If the economy produces 4 units of consumer goods per period,it also can produce,at MOST,_____ units of capital goods per period.

If an economy is producing a level of output that is on its production possibility frontier,the economy has:

Use the following to answer question: -(Table: Production Possibilities Schedule II)Use Table: Production Possibilities Schedule II.If the economy is producing at Y,the opportunity cost of producing at Z is _____ units of consumer goods per period.

Use the following to answer question: -(Figure: Wine and Wheat)Use Figure: Wine and Wheat.The opportunity cost of moving from producing ONLY wheat to producing ONLY wine is _____ tons of wheat.

Positive economics is the branch of economics that makes prescriptions about the way the economy should work.

Because models make simplifying assumptions,they are of very little use in the real world.

If an economy produces the desired mix of goods from its available resources,then this mix of goods is:

In the circular-flow diagram,an organization that produces goods or services for sale is a:

A simplified version of reality that is used to clarify economic situations is called a(n):

In the circular-flow diagram,the product market is where:

Which statement is TRUE?

Which item is NOT a factor of production?

Which of the following is sold in the product market?

One of the controversies surrounding the United States' energy markets is the trade-off between energy production and clean air.Assuming clean air has value,the United States will be on its production possibility frontier if and only if:

It is impossible for economists to use computers to simulate how the economy works.

Use the following to answer question: -(Figure: Production Possibility Frontier)Use Figure: Production Possibilities Frontier.This production possibility frontier is:

Use the following to answer question: -(Table: Production of Good Z and Good X in Urbanville)Use Table: Production of Good Z and Good X in Urbanville.This table shows the production possibility frontier for Urbanville.Suppose Urbanville is producing at combination F,what is the opportunity cost of a move to combination E?

Use the following to answer question: -(Table: Production Possibilities Schedule II)Use Table: Production Possibilities Schedule II.If an economy is producing at X,the opportunity cost to it of producing at Y is _____ units of consumer goods per period.